Landlord Exodus Slows as Renters' Rights Act Takes Effect in 2026

Market Stabilisation Signals Shift in Landlord Strategy

The pace of landlord departures from the private rented sector has slowed significantly, with new data suggesting the market is adjusting to the regulatory landscape introduced by the Renters' Rights Act. According to analysis by Hamptons, the proportion of homes listed for sale by landlords fell to 9.2% in June 2026, down from 11.3% a year earlier—marking a notable deceleration in exits that had accelerated ahead of the legislation's implementation on 1st May.

The shift represents a turning point for the sector. June marked the first time since 2019 that landlords purchased more properties than they sold, accounting for 10.2% of purchases compared with 9.2% of homes listed for sale that had previously been rented. This rebalancing suggests that whilst the Renters' Rights Act may have prompted some landlords to exit, the larger wave of departures was driven by earlier tax changes and elevated mortgage costs—factors that continue to constrain investment returns across much of the country.

The Re-Letting Ban Effect

A key deterrent to further landlord sales has emerged in the form of the mandatory 12-month re-letting ban. Landlords using a Ground 1A notice to regain possession in order to sell now face a significant restriction: even if they fail to find a buyer, they cannot return the property to the rental market for a full year. This rule change has fundamentally altered the risk-reward calculation for investors considering a sale.

Hamptons' analysis of 2025 lettings data reveals the scale of this constraint. Some 51% of rental properties marketed for sale did not sell, with the figure rising to 60% for flats. The agency estimated that had the new rules been in force last year, between 80,000 and 100,000 unsold rental homes would have been prevented from returning to the rental market for 12 months—a sobering prospect for landlords facing an uncertain sales environment.

"What's changed more recently is the balance of risk," said Aneisha Beveridge, head of research at Hamptons. "A tougher sales market and the introduction of a 12-month re-letting ban mean selling has become a more complicated proposition for landlords. For many, the prospect of being left with an empty property that can't easily return to the rental market has made holding on to an investment look more attractive."

Regional Divergence and Rental Growth

Landlord exits remain most concentrated in London and the South of England, where higher property prices, lower yields and mortgage costs continue to compress investor returns. In London, 20.3% of homes listed for sale in June had previously been rented within the last five years, compared with just 9.5% in the South East—illustrating the particular pressures facing metropolitan investors.

Rental market dynamics also vary significantly by region. Newly let homes across Great Britain saw rents rise by 1.6% year-on-year in June to an average of £1,392 per month, the strongest annual increase for 13 months. The North East emerged as the strongest performer, with newly agreed rents up 4.3% year-on-year to £859 per month. By contrast, Inner London's rental growth continued to decelerate, falling from 1.6% in May to 0.4% in June, though Outer London returned to positive annual growth for the first time in 12 months at 1.9% year-on-year.

For existing tenants whose rent increased during June, the average uplift was 5.4%—reflecting the gap between newly let and renewal rates across the market. These divergent rental trends underscore the importance of location analysis when evaluating investment opportunities. Investors seeking to understand the regulatory landscape should monitor planning alert tool updates, whilst those exploring tactical buying strategies may benefit from deal finder resources to identify emerging opportunities in stabilising markets.

Source: Property Industry Eye.